Foreign Exchange

Get all the latest new from the 2009 UK Budget on April 22 2009 live here.

Chancellor, Alistair Darling, will make his Budget statement to the House of Commons at 12.30 pm today. How will that effect your Foreign Exchange position.

Stay on this page for a sector by sector breakdown of how the Budget will effect you or your companies trading position.

GBP Foreign Exchange Rate Forecast Today 22nd April 2009

Sterling Strengthens but economists advise caution ahead of Today’s UK budget.

Many people seems to be cautious ahead of the UK budget where the government is expected to forecast the economy is shrinking at its fastest pace in sixty years with a 3-3.5% slowdown in the UK economy this year, far than the November forecast of 0.75-1.25 percent.

Chancellor, Alistair Darling, will make his Budget statement to the House of Commons at 12.30 pm today and this could bring with it one of the most volatile trading sessions we have seen for a long time. The budget can last up to five hours and as it only happens once a year it can be difficult to predict how sterling foreign exchange rates will react to the budget statement.

We also have the Bank of England  minutes out this morning which will give us an  indication as to their reasoning for the last interest rate decision and what their strategy may be to try and stabilise the UK economy.

Speaking  before parliament, the new Bank of England Monetary Policy Committee member Paul Fisher indicated further weakness in global economic demand could hold back UK growth.

“The major risks I am concerned about are that monetary accommodation does not have sufficient positive impact on demand that we miss the inflation target on the downside,”

He went on to imply the Bank of England will have to discuss seriously whether it needs to increase its quantitative easing programme.

If you are thinking to sell off or buy Sterling Today in the foreign exchange market, you would be well advised to stay in close contact with your broker throughout the day. Telephone  FX-Foreign Exchange on +44 (0) 1480.458400 for the latest market reports and trading foreign exchange rates.

At FX-Foreign Exchange we can  offer you forward contracts  for up to two years into the future to take the risk factor away from your foreign exchange purchase and this will give you peace of mind so you will know exactly how much your currency will achieve for you. Or if you are wanting to achieve a rate that is not quite there you can place a limit into a live market as your target level may be reached when the UK trading session is over as the American and Asian sessions are just opening and the currency markets are moving 24 hours a day.

UK DEFLATION

In other news Sterling showed little reaction to the inflation data out yesterday.

UK annual inflation measured by the Retail Prices Index went negative in March for the first time since 1960, to -0.4%, down from zero in February. RPI includes mortgage costs, which have fallen following the Bank of England’s reductions in interest rates.

The Consumer Prices Index fell in March to 2.9% after February’s unexpected rise to 3.2%, the Office for National Statistics said. The official CPI figure is still well above the government’s target of 2%.

EURO DATA

Germany’s ZEW economic sentiment index posted its first positive reading since July 2007, pointing to a possible pick-up in the nation’s economy in the second half of 2009.

The ZEW index, which measures the confidence in the financial markets, rose by 16.5 points from minus 3.5 points in March to 13 points in April. ZEW president Wolfgang Franz stated

“It is even becoming more likely that the economy will slowly recover in the second half of this year”

This may not be the best of news for anyone with a Euro requirement so with the extremely rare spikes arising in the market place at present you should open an account if you do not already have one so you can capitalise when a good buying opportunity does arise. please feel free to apply for an account here. It is totally free to set up and bares no obligation on your part.

Our currency exchange services provide a professional, efficient and cost-effective method for currency conversion. Our very personal service is suited to business users, needing to buy forex at the best currency exchange rates available, and for the private clients who wish to make a single money transfer, or regular payments such as overseas pension transfers. Call FX-Foreign  Exchange now on +44 (0) 1480.458400 .

Sterling Forecast for April 21 2009

CBI Predicts Slow Recovery
A pattern usually seen with Sterling this year yesterday’s trading saw many of the gains made over the course of last week lost again losing 0.80% against the Euro and a whopping 1.67% against the Dollar.
The majority of the losses appear to be down to a report released by the CBI (Confederation of British Industries) predicting that we should see growth in the economy again in Spring of 2010 but any recovery will be ‘”slow and fragile.”
The predictions released by the CBI predicted that the U.K economy would shrink by approximately 3.9% over the course of 2009 but start to turn around over the course of 2010 eventually growing by 0.2% in the second quarter. A report also released by Earnst and Young although sounding slightly better still echoed a large contraction throughout this year with the U.K shrinking by 3.5%
It is widely expected that Alistair Darling himself will predict economic contraction for the U.K in 2009 at 3% during the budget - much higher than his last forecast in November which sat between 0.75% - 1.25%.
These reports have come from highly respected sources and once again do not spell out a good short term future for Sterling, so should you have an upcoming currency requirement that is fairly imminent, or indeed in the future it may be wise to contact your account manager here at FX-Foreign Exchange to discuss the options available to you, to ensure the cost of your purchase does not run over budget due to adverse market movements.
Here at FX-Foreign Exchange we have a variety of tools to protect both private and commercial clients against adverse market movements, including limit orders and forward contracts. If you aren’t sure as to what these tools do and how they work then please do feel free to pick up the phone and call one of our dedicated and friendly traders on +44 (0) 1480 458400 or click here to make an enquiry online and we will call you back.

Budget 2009
As most regular readers may be aware tomorrow brings the release of the budget by chancellor
Alistair Darling. This should almost certainly lead to market volatility during its announcement as it should give key indications as to the plan of action to conquer the recession we have found ourselves in.
Should the budget release be seen as positive for the U.K then we could see positive movements for the Pound and likewise should Mr Darlings comments indicate that we are in for a rough ride then Sterling could well lose further ground against a basket of major currencies.
If you have a requirement - whether it be to buy or sell foreign currency then it is imperative that you are in a position to move off of the back of a phone call. Our traders are there to keep you up to date with market movements and by having a active trading facility it puts you in the position to book out a rate should the markets move in your favour.
For example: If you had $100,000 to exchange into Sterling yesterday you could have achieved nearly £1000 more for your money by trading at the optimum point of the day…. certainly makes you realise that this is real money you are dealing with and tomorrow could throw up some fantastic opportunities so please do make sure you are available should we need to get in touch.
Today’s data
With the budget looming tomorrow it is easy to forget that we still have another day of data releases due out today which may cause just as much volatility on the markets and create just as many great opportunities to secure your rate, today’s releases are outlined below:
09:30 U.K Consumer Price Index - Month on Month and Year on Year
09:30 Retail Price Index - Month on Month and Year on Year
These are key inflation releases and will give a good indication as to how inflation has been affected by the recent slowdown alongside the decision to proceed with quantitative easing.
10:00 German ZEW Survey - Economic Sentiment
This measures the share of investors that are optimistic against the share of analysts that are pessimistic. An optimistic view will be viewed as positive for the Euro and pessimistic negative.
14:00 BOC interest rate decision
The Bank Of Canada release their monthly interest rate decision. As regular readers will know an interest rate cut generally has a negative effect and a hike a positive. The expectation is for the BOC to keep rates on hold at 0.5%. A release different to this should cause volatility.

Our currency exchange services provide a professional, efficient and cost-effective method for currency conversion. Our very personal service is suited to business users, needing to buy forex at the best currency exchange rates available, and for the private clients who wish to make a single money transfer, or regular payments such as overseas pension transfers. Call us at FX-Foreign Exchange on Tel +44  (0) 1480 458400 for a personal consultation with a broker.

Sterling Forecast for April 20 2009

UK Budget
All eyes will be on Alistair Darling this week as he announces his budget on Wednesday. With the UK facing possibly the most challenging economic situation ever recorded it will be interesting to see how Darling plans to pull the UK out of recession. It will be an unenviable task trying to offer the economy support while reassuring the markets that the UK will eventually return to full health. In my opinion he is unlikely to achieve either.

Roger Bootle, economic advisor to Deloitte believes that Darling will have to concede that the economy will contract sharper this year than original predictions and that next year’s recovery may also be weaker. With huge levels of debt and a recession looking likely to last longer than predicted the budget could possibly put further pressure on the Pound.

With interest rates in the UK now at the lowest levels in history leaving the Bank of England with very little room for manoeuvre and one of the largest budget deficits in the world it is unlikely to see investment pouring into the UK. This means it is very hard to see the pound continuing its positive run from last week which saw us hit a 3 month high against the dollar and a 6 week high against the Euro. So, if you have an upcoming currency requirement speak to one of our dedicated account manager today to discuss all the options open to you including a forward contract where, for a small deposit, you can fix your exchange rate at today’s prices for a time in the future protecting yourself from any possible market fluctuations.

Bank of England Minutes
Also released on Wednesday are the Bank of England minutes which could give the markets an insight into the thinking behind the Bank of England’s upcoming interest rate decisions and whether they are going to increase the current levels of quantitative easing. Again this could have a big impact on the exchange rates so ensure you keep in close contact with your account manager here at Foreign Currency Direct or if you do not already have an account you can open one for free with no obligation to trade here.

Euro
Comments from the Eurozone on Friday made for confusing reading as several members spoke out calling for further rate cuts but Axel Weber, the president of the Bundesbank and probably most influential member of the committee ruled out cutting rates below 1%. “He’s a Bundesbank president, he’s very influential,” said Nick Kounis, chief European economist at Fortis in Amsterdam, “I always see his remarks as a very good indication of what happens next.”

With a split opinion in the Eurozone it makes it even more difficult to predict what will happen in the currency markets over the coming weeks and months. Therefore, if you need to transfer money internationally it could be worth making the most of the current highs and by trading today avoiding any further uncertainties that may remain in the market.

Forex for Business
The UK recession continues to hinder companies on the high street as more redundancies were announced with Sony Ericsson cutting 2,000 jobs and Toshiba laying off 3,900 staff. As high street names continue to struggle it continues to put the global economy under further pressure with unemployment still rising and therefore spending levels falling. If your business is finding the current climate challenging then we at FX-Foreign Exchange may be able to save you money on your currency transfers.

Our currency exchange services provide a professional, efficient and cost-effective method for currency conversion. Our very personal service is suited to business users, needing to buy forex at the best currency exchange rates available, and for the private clients who wish to make a single money transfer, or regular payments such as overseas pension transfers. Call us at FX-Foreign Exchange on Tel +44  (0) 1480 458400 for a personal consultation with a broker.